One Price Fits All

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ARTI V. FINN

October 15, 1993

ISSUE DATE: October 15, 1993

UPDATED: October 15, 1993 00:00 IST

OCTOBER marks the beginning of the tourist season in India. It is also the time when luxury hotels revise their tariffs upwards. Foreign travellers have to pay in dollars, while the domestic tourists pay their tariff in rupees. But this year holds a surprise for both of them.

A Ministry of Tourism directive has removed the existing dual rate system. Now the hotels will have to charge a single rate from both the foreign and the domestic traveller. Under the old system, a room at a luxury hotel was available for $170 per night (about Rs 5,500) for foreigners while the rupee rate was Rs 3,600. The hotel thus earned Rs 1,900 extra from each foreigner per night. But under the new system, the hotels will be allowed to charge only one rate.

"Foreigners will be quoted the rupee rate and that rate should be the same for Indians and foreigners," says J.M. Lyngdoh, secretary in the ministry. "Foreigners are free to pay in dollars or rupees." Also, hotels will be allowed to offer discounts to ensure that the Indian traveller is not affected.

This decision comes after foreign tour operators objected to a policy they regarded as unfair. According to them, foreigners felt cheated because they were asked to pay more than Indians. Says Inder Sharma, chairman Sita Travels: "Hotels should not change their rates according to the purchasing power of the customer."

Hoteliers are not happy with the new order. They feel that their dollar tariffs are still cheaper than those abroad and therefore foreigners have no reason to complain.

But there is no harm in sharpening the price edge.

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